This blog is for owners and executives of growth-oriented businesses who share our growth mindset and passion for building value. Here, we share insights and experiences in our growth journey, things we learned with or from our clients, that can help you reach your next mountaintop. Enjoy!
Three Ways to Grow, Especially Now.
Posted on: April 27th, 2020
If you think of growth as a choice – which I believe it is – dedicating energy to it in difficult situations becomes easier. As parents or business leaders we are worried about health, high unemployment, economic depression, and for how long. Framing growth as a choice helps to grow stronger and prepare for better days.
Here are three ways I’m preparing myself and others to grow: manage growth as a choice (especially in difficult times), optimize, and build a new valuable capacity.
First and foremost, let’s pursue growth as a choice. Sure, moan about politicians screwing up PPE or PPP or other COVID-related acronyms, and all that maybe true, but it does little to help you and me move forward. I view growth as a choice, to either nurture an opportunity or minimize a danger, either way to grow stronger. That’s the starting point. Growth is up to us.
Now, you may face a business situation where you can optimize profits from an identifiable and likely smaller pool of customers near term. And you can build a new valuable capacity. Like many of you, I’m in both situations amidst extreme economic uncertainty. Here’s what I’m learning now:
A gritty optimization model like KISS, short for ‘keep it simple, stupid’, can help any company, especially now with weakening demand outlook. Like “clearing the brush” to give more sun light and energy to fewer trees so they become stronger and more valuable timber. Think of it as the 80/20 rule on steroids, beyond the defense strategies we implemented in March and April. A client of ours, forced by COVID-lockdowns and order cancellations, quickly executed cost-cuts, layoffs, and pivoted production to “essential goods”. Pre-COVID we had helped the company to triple revenues (with about 20% of customers providing 85% of revenues, pretty close to 80/20 efficiency), but now the team is consumed hour-by-hour managing a different model. The owner envisioned a KISS model to “do less, make more” with three ingredients: A) optimize lower revenues from fewer but “easiest to serve” and higher margin customers, B) enabling process simplification and thus C) resource/cost reductions to serve them, profitably. Easier said than done, which is why the owner assigned an off-site, been-there-done-that growth Sherpa to define the KISS model, then spearhead disciplined execution to get it right. KISS is about growing stronger, more profitable, not bigger. Do the above A), B), C) steps help you frame the optimization opportunity for your business?
Finally, all companies can benefit from new valuable capacity, to grow more profitable. To differentiate valuable from wasteful capacity requires a disciplined approach of separating wheat from chaff. That process often takes a backseat during high growth bull markets, with low unemployment and a tight labor pool (surely no longer a constraint for the foreseeable future). In my company for the last 11 years we relied on word-of-mouth advertising and referrals to grow every single year. While we talked about building lead gen and prospecting capacity, as a new valuable capacity, we were too busy serving clients to actually build it. The current climate created an opportunity to conceptualize and build an approach to produce and distribute video content to support our lead generation, which we’ll start rolling out next month. What new valuable capacity are you working on?
Paco Underhill (author of “Why We Buy”) wrote this as PostPan Reflections the other day: “Millennials will have the heavy lifting of navigating us into the future. They will learn to live more lightly on Earth. Technology will allow them to get small, more local and focused. Their ingenuity and imagination will manifest in a natural spirit of problem-solving. We already see this with the impressive collaboration and cooperation of the global scientific community working as allies against Covid-19. And their younger siblings and even their own children will remake our world in a fusion of humanity and technology. As for now, I take solace in knowing the European Renaissance that got us to where we are now emerged with the survivors of the Black Death.”
We choose to either grow, freeze in place, or worse. The phoenix rising from the ashes is a powerful symbol of growth and hope. Yes, growth is a choice. As entrepreneurs or executives getting ready for a PostPan world we must move from defense to offense, optimize and build new valuable capacity.